The real reason Britain can't cut taxes isn't spending, it's how the state buys services, new analysis finds

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Think Tank: The real reason Britain can't cut taxes isn't spending, it's how the state buys services, new analysis finds

LONDON, 11th February 2026 — Trafalgar Analytics' Economics & Growth Team has today published a discussion paper by political analyst Bukes, arguing that Britain's inability to cut taxes has less to do with the overall level of government spending than with how councils and the state procure the services that spending pays for. Using Kent County Council's home-to-school transport budget as a case study, the paper argues the same procurement failures sit behind council tax rises nationwide, regardless of which party is in charge locally. These structural problems confront both national and local governments.

A national warning dressed as a local story

Kent County Council, Reform-led since the 2025 local elections, raised council tax by 3.99% in January 2026, after reports the previous October suggested a rise closer to the statutory 5% cap. The paper notes this is not unique to Kent. Councils of every political stripe face the same pressure, since 61% of council tax already goes on Children's and Adult Social Care, according to Local Government Association figures.

The paper argues Reform UK will face an identical bind once in national government. It points to Nigel Farage's own statement, ahead of the autumn 2025 budget, that "substantial tax cuts" were not currently realistic.

The numbers behind Kent's taxi spending

The paper's central case study examines Kent's £98 million annual home-to-school transport bill, covering over 6,000 SEND pupils. In October 2025, 2,200 taxi contracts provided 14,000 seats, roughly double what the council actually needs.

• 64% of journeys rely on 4-seater taxis, which cost up to £84 per seat per day, compared with under £17 per seat for vehicles with 20 or more seats.

• The most expensive 4-seater contract costs 22 times more than the cheapest for an equivalent journey.

• Over 99% of the implied travel distances in these contracts exceed the national average school commute of 6.4 miles round trip, suggesting many providers are charging well above their own published mileage rates.

Poor procurement design and a total absence of competition mean councils are trapped paying whatever contractors ask. "Taxi contracting in Kent is a microcosm highlighting the scale of challenge faced by local councils, desperately working to control statutory spending," said Bukes, author of the paper and Associate at Trafalgar Analytics. "There is no accountability nor incentives for Council Officers... to limit the rising spending beyond complaining about lack of central government funding." 

Four conditions for future tax cuts

The paper argues that any future government can only credibly cut taxes once it addresses four structural problems in how the state buys and delivers services.

• Letting publicly-owned companies act as marginal price setters, competing directly with private contractors to bring costs down.

• Rebuilding state capacity through new borrowing mechanisms that don't unsettle gilt markets.

• Using asset-seizure nationalisation in sectors with genuine market failure, pointing to British Steel as a recent precedent.

• Reasserting economic sovereignty through targeted tariffs, foreign-ownership restrictions, and antitrust action against dominant firms.

Additional Information

The full discussion paper, "Kent's tax problems are Britain's tax problems," is available here.

Media Contact

Sarah Moore (Senior Communications Officer), Trafalgar Analytics

media@trafalgaranalytics.co.uk

ENDS

NOTES TO EDITORS

• The paper was authored by Bukes, a political analyst and Associate at Trafalgar Analytics, with editorial oversight from Trafalgar Analytics' Economics & Growth Team.

• "Kent's tax problems are Britain's tax problems" is available here.

• For more information or interview requests, please contact Sarah Moore on media@trafalgaranalytics.co.uk.

• Trafalgar Analytics is a British data analytics and research centre. Its work sits at the intersection between data science, economics, and political science. It believes in a data driven approach for tackling the foremost societal, economic, and political challenges of our time.